Archive for gold

All my gold analysis is now on my personal blog : post of 3rd May pre-empted huge fall in spot gold prices. Next stop for gold price could be as low as $1400 to $1412 per ounce which is where 100 day moving average. On the weekly chart the spot gold price has not broken the 40 week average since early 2009 and this is sitting at $1366 – so anything is possible in the next few weeks.

The spot gold price firmed up early today on the back of a weaker US dollar and inflation fears but has since softened with a mild return to strength for the US dollar taking the spot rate to $1367 per ounce at time of writing. As I have written in several posts on my personal financial blog, gold is having a difficult time recently regaining its upwards momentum and has basically been consolidating sideways since October last year. However, it is only recently that the spot gold price has broken below our three shorter term moving averages and the danger is that gold could now be looking to target the 200 day moving average which is sitting in the $1275 per ounce region.

The weekly chart exhibits a broadly similar picture with the exception that the gold price has managed to stay above both the 40 and 200 week averages. Indeed one of the most remarkable features of the recent bull rally in gold has been that on the weekly chart the price has not broken below the 40 week average since January 2009. This key average on the weekly chart currently sits at the $1300 per ounce price region and if we do see a further strengthening of the US dollar in the short term, be prepared to see the spot gold price move to test the first layer of support between $1325 and $1350 before possibly falling back to the $1300 per ounce price point.

My longer term forecast for gold still remains $1650 per ounce which I expect to see achieved later this year.

The gold price on Wednesday, continued to push towards the all time high for the gold, briefly touching the $1022 per ounce level before ending the gold trading session marginally lower, but with a wide spread up bar which reinforced Tuesday’s bullish sentiment in the gold market. With all three moving averages pointing firmly higher, we could see a new high for the price of gold in the next few days, should this bullish sentiment remain firm, which seems to be the case at present following the dramatic breakout of two weeks ago. However, today’s trading has seen a minor pullback, with the the gold price ending lower, but with a weak candle on the daily gold chart, particularly given the deep upper wick. Although this candle is bearish, the spread is relatively limited, and therefore the reversal lower may only be a temporary pullback before we see the price of gold surge higher once again. With the weekend ahead, gold traders will be squaring their positions, and therefore Friday may see a fall in the gold price as a result, before we see a return to the bullish momentum once again of the last few days.

Yesterday’s gold trading price continued the bullish momentum for spot gold ending the trading session with an up candle but with a deep lower wick suggesting that we should see a stronger move higher in gold prices in the gold term. Indeed this view is reinforced by several candles over the last few days on the daily gold chart which have all ended the trading session with deep lower wicks which have subsequently found support from the 9 and 14 day moving averages, which is always a positive sign that the bullish trend will be sustained. With the daily close of yesterday finishing well above the $1000 per ounce level we are now in a strong position to see gold prices push higher from this solid platform and break well into the $1000 plus region in the medium term. This trend high is fully supported by all three moving averages which are pointing sharply higher.

Another interesting day for gold traders yesterday, with spot gold prices once again flirting at the $1000 per ounce level, initially opening gapped up above this price point, but finally ending the gold trading session marginally below. From a technical perspective yesterday’s candle ended with a narrow spread down bar but with a relatively deep lower wick which found support from the 9 day moving average in much the same way as for Thursday’s candle last week, suggesting that the bullish momentum remains intact for the time being despite what the pessimists (and UBS) are suggesting. This bullish momentum has been given added impetus by news that central banks are set to become net buyers of gold this year for the first time since 1998. With all three moving averages pointing sharply higher and with the technical support outlined above we should see spot gold prices breach and hold the 4 figure level in due course before moving higher in the medium term and my trading suggestion for today is to look for small long positions on an intra day basis buying on any dips and particularly where the price touches the 9 day moving average.